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The U.S. steel market's red-hot start to the year is set to cool off—again.

Twice since the 2008 financial crisis, the U.S. steel market seemed well on its way to recovering from its recession-era lows, surging in early 2010 and 2011. And each time, investors banking on a revival in the heavy metal have come away empty-handed.

Now, 2012 is shaping up to be the same story, and the stocks of major steel companies already are bearing the brunt.

"We're not going to have a boom year in the steel industry," said Nicholas Sowar, a partner at consultancy Deloitte's steel practice.

Steel prices climbed at the beginning of the year as auto makers, oil and gas drillers and factories ramped up their purchases of the metal to feed a surprisingly strong U.S. economy. Hot-rolled coil—a key steel product that can be shaped into car frames and pipes, among other uses—gained 20% between November and early January, according to the Steel Index, peaking at $748 a ton. It's now $697.

But U.S. coil prices fell 6% in February as the economy's strength, and higher prices, drew boatloads of steel from overseas that were originally meant for consumption in Europe and Asia. Imports of finished steel during the first two months of the year were up 29% from the same period last year, according to the American Iron and Steel Institute.

This underscores the fact that while U.S. demand has picked up, it still isn't strong enough to return to prerecession heights.

The share prices of the leading U.S. steel makers also have sank in the aftermath. Shares of
AK SteelAKS -5.324074074074074%AK Steel Holding Corp.U.S.: NYSEUSD4.09
-0.23-5.324074074074074%
/Date(1425412181439-0600)/
Volume (Delayed 15m)
:
6384379
P/E Ratio
N/AMarket Cap
768031246.339131
Dividend Yield
N/ARev. per Employee
1016520More quote details and news »AKSinYour ValueYour ChangeShort position
(ticker: AKS) are down 27% from their January highs, closing on Friday at $7.32, down 5.7% on the week.
United States SteelX -4.114189756507137%United States Steel Corp.U.S.: NYSEUSD22.84
-0.98-4.114189756507137%
/Date(1425412176919-0600)/
Volume (Delayed 15m)
:
5637065
P/E Ratio
33.22463768115942Market Cap
3469644867.96234
Dividend Yield
0.8724100327153762% Rev. per Employee
454727More quote details and news »XinYour ValueYour ChangeShort position
(X) is down 17% from their 2012 highs, and down 2.4% on the week.
NucorNUE -0.5728835136855506%Nucor Corp.U.S.: NYSEUSD46.86
-0.27-0.5728835136855506%
/Date(1425412175440-0600)/
Volume (Delayed 15m)
:
923890
P/E Ratio
22.33809523809524Market Cap
15036685312.7028
Dividend Yield
3.1762950330419955% Rev. per Employee
946419More quote details and news »NUEinYour ValueYour ChangeShort position
(NUE), with the cleanest balance sheet of the bunch, is down 7% from high this year, and off 3% for the week. Steel makers peaked early in the year in both 2010 and 2011, too, only to see those gains fade.

The lesson is to stay cautious about the steel sector until the U.S. construction industry finally manages a sustained revival. In a booming market, commercial construction and related industries can account for as much as half of U.S. steel consumption. But since the housing bust stalled the building of strip malls and office buildings, it's been closer to 25%.

"We still have a ways to go," Leo Larkin, an analyst with S&P Capital IQ, says of the steel industry. "Just sort of two steps forward, one step back."

Still, the groundwork is being laid for a bull market in steel—one that may finally follow through on its initial promise.

The steel makers that survived the financial crisis and its aftermath have emerged stronger, paring their debt and cutting costly operations. Also, the auto industry, a major source of steel demand, has been surprisingly strong.

And while few are expecting construction to meaningfully improve this year, the future holds some promise.

The American Institute of Architects, a closely watched forecaster of construction activity, expects just a 2% increase in U.S. commercial-construction spending this year. However, the AIA expects that growth to accelerate to 6.4% in 2013. Now there's something to build on.

MATT DAY covers metals and other subjects for Dow Jones Newswires in New York.